|
Exhibit 10.4
FIRST AMENDMENT TO REVOLVING CREDIT
AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "
Amendment ") is made as of December 11, 2006, among
RAIT INVESTMENT TRUST, a Maryland trust ("RAIT"), RAIT PARTNERSHIP,
L.P., a Delaware limited partnership (" RAIT OP "), and RAIT
ASSET HOLDINGS, LLC, a Delaware limited liability company ("
RAIT SPE ") (RAIT, RAIT OP and RAIT SPE are hereinafter
referred to individually as a " Borrower " and collectively
as the " Borrowers "), KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent (the " Administrative Agent "), and the
LENDERS party to this Amendment (the " Lenders ").
WITNESSETH :
WHEREAS, capitalized terms used in this Amendment without
definition have the meanings provided therefor in that certain
Revolving Credit Agreement dated as of October 24, 2005, by
and among the Borrowers, the Administrative Agent and the Lenders
(the " Credit Agreement "); and
WHEREAS, the Borrowers have requested that the Administrative
Agent and the Lenders agree to amend, and to waive certain
provisions of, the Credit Agreement, and the Administrative Agent
and the Lenders have agreed to amend, and to waive certain
provisions of, the Credit Agreement, on, and subject to, the terms
and conditions set forth herein,
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrowers,
the Administrative Agent and the Lenders agree as follows:
1. Amendments to Credit Agreement . As of the Effective
Date (as hereinafter defined), the Credit Agreement is hereby
amended as follows:
-
(a) The following definitions are hereby added to
Section 1.1 of the Credit Agreement in the proper alphabetical
sequence:
" Excluded Subsidiary " means any Consolidated Subsidiary
(other than a Borrower) whose Debt consists solely of Debt issued
or incurred pursuant to a securitization transaction, provided in
each case such Debt is not Recourse Debt of the Borrowers or
Taberna.
" Excluded Debt " means Debt issued or incurred by a
Borrower or a Subsidiary of a Borrower pursuant to any loan or
warehouse facility provided that such Debt is not Recourse Debt of
the Borrowers or Taberna."
" Taberna " means Taberna Realty Finance Trust, a
Maryland real estate investment trust. Upon the occurrence of the
Taberna Closing Date, Taberna shall be a Subsidiary of RAIT and a
Consolidated Party.
" Taberna Acquisition " means the
acquisition by RAIT of all of the Capital Stock of Taberna
(excluding certain shares of Capital Stock which will be retained
by Persons not affiliated with the Borrowers for the purpose of
compliance with REIT regulations) by means of a merger by and
between a Subsidiary of RAIT and Taberna.
" Taberna Closing Date " means the date on which the
closing of the Taberna Acquisition occurs.
(b) The definition of "Adjusted Earnings" in Section 1.1 of
the Credit Agreement is hereby amended by changing the phrase "Net
Income" therein to "REIT taxable income of the Consolidated Parties
calculated in accordance with the Code, before giving effect to the
dividends paid deduction".
(c) The definition of "Borrowing Base Availability" in
Section 1.1 of the Credit Agreement is hereby amended by
changing the phrase in clause (y)(ii) thereof from "2:00 to 1:00"
to "1.50 to 1.00."
(d) The definition of "EBITDA" in Section 1.1 of the Credit
Agreement is hereby amended by adding the following phrase at the
end thereof: " All amounts determined in clauses (i) through
and including (v) shall be determined (i) as if all
Excluded Subsidiaries were not included in the Consolidated Parties
and were instead accounted for using the equity method of
accounting and (ii) all Interest Expense relating to Excluded
Debt and all income relating to assets securing Excluded Debt were
not included and were instead accounted for using the equity method
of accounting."
(e) The definition of "Interest Expense" in Section 1.1 of
the Credit Agreement is hereby amended by adding the following
phrase at the end thereof: "; and provided further, that, on and
after the Taberna Closing Date, for the purposes of calculating the
Interest Coverage Ratio under 5.8(b) and the Fixed Charge Coverage
Ratio under 5.8(c), "Interest Expense" shall not include any
interest expense relating to any Excluded Subsidiary or Excluded
Debt."
(f) The definition of "Fixed Charge Coverage Ratio" in
Section 1.1 of the Credit Agreement is hereby amended by
adding the following phrase at the end thereof: "All amounts
determined in clauses (a) through and including (b) shall
be determined as if (i) all Excluded Subsidiaries were not
included in the Consolidated Parties and were instead accounted for
using the equity method of accounting and (ii) all Excluded
Debt and assets securing Excluded Debt were not included and were
instead accounted for using the equity method of accounting.
(g) The definition of "Secured Debt" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety.
(h) The definition of "Total Assets" in Section 1.1 of the
Credit Agreement is hereby amended by adding the following phrase
at the end thereof: "; and provided further, that, on and after the
Taberna Closing Date, for the purposes of calculating the Leverage
Ratio under Section 5.8(a), Total Assets (i) shall be
determined as if the assets
-2-
-
of Excluded Subsidiaries or assets securing
Excluded Debt were not included in the Total Assets and
(ii) shall include investments of the Consolidated Parties in
such Excluded Subsidiaries and assets securing Excluded Debt using
the equity method of accounting."
(i) The definition of "Total Liabilities" in Section 1.1 of
the Credit Agreement is hereby amended by adding the following
phrase at the end thereof: "; and provided further, that, on and
after the Taberna Closing Date, for the purposes of calculating the
Leverage Ratio under Section 5.8(a), Total Liabilities
(i) shall be determined as if all Debt of the Excluded
Subsidiaries and Excluded Debt were not included in the Total
Liabilities and (ii) shall not include Debt constituting
subordinated debentures or trust preferred securities ("TruPS")
issued by Borrowers or Taberna or a Wholly-Owned Subsidiary of
Taberna that are approved by the Administrative Agent in its
discretion."
(j) The definition of "Unsecured Debt" in Section 1.1 of
the Credit Agreement is hereby deleted in its entirety.
(k) Section 2.18 of the Credit Agreement is hereby amended
by changing the phrase in clause (a) thereof from
"$80,000,000" to "$165,000,000".
(l) Section 5.8(a) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows: "(a)
Leverage Ratio . At all times the Leverage Ratio will be
less than or equal to sixty percent (60%)."
(m) Section 5.8(d) of the Credit Agreement is hereby
amended and restated to read as follows: "[Reserved]".
(n) Section 5.8(e) of the Credit Agreement is hereby
amended and restated to read as follows: "(e) Recourse Debt to
Total Assets . At all times, the ratio of (i) the Debt of
the Consolidated Parties that is Recourse Debt to RAIT or RAIT OP
to (ii) the Consolidated Tangible Net Worth of the
Consolidated Parties shall be less than or equal to 0.35 to
1.00."
(o) Section 5.8(f) of the Credit Agreement is hereby
amended and restated to read as follows: "[Reserved]".
(p) Section 5.8(g) of the Credit Agreement is hereby
amended by changing the phrase "$500,000,000.00" in clause
(i) thereof to "85% of tangible Net Worth on the Effective
Date".
(q) Section 5.8(j) of the Credit Agreement is hereby
amended by changing the phrase "Net Income" therein to "REIT
taxable income of the Consolidated Parties calculated in accordance
with the Code, before giving effect to the dividends paid
deduction".
(r) Section 5.14 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows: "Section 5.14
Liens; Release of Liens . The Borrowers shall not at any
time during the Term directly or indirectly create, incur, assume
or permit
-3-
-
to exist any Lien on or with respect to any
Borrowing Base Asset or any Capital Stock of RAIT OP, RAIT SPE or
any SPE Subsidiary for borrowed monies or any other Lien (other
than Liens in favor of the Administrative Agent and the Lenders),
unless the same is being contested in good faith or the same is
discharged, bonded off or paid within thirty (30) days of
filing of such Lien."
(t) Section 5.17 of the Credit Agreement is hereby amended
by adding the following phrase at the end of the first sentence
thereof: "and those businesses in which Taberna is engaged on the
Taberna Closing Date".
2. Waiver . On and subject to the terms and conditions of
this Amendment, compliance by the Borrowers with the covenants
contained in Section 5.9 of the Credit Agreement is hereby
waived, solely to permit the Taberna Acquisition; provided,
however, such Taberna Acquisition shall occur by
December 31, 2006. The waiver granted pursuant to this
Section 2 is referred to herein as the " Taberna
Acquisition Waiver ." The Taberna Acquisition Waiver shall
terminate on December&n
|
